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Sales fall in key UK cities and prices start to plateau
Sales in 20 key cities across the UK fell by 2% in the last 12 months but prices have continued to rise, up 10.2% from a year ago, the latest price index shows. London has seen a 7% fall in transactions while Cambridge has seen sales fall by 20%, according to the UK cities house price index from Hometrack. Overall city level house price inflation has increased from 8.6% a year ago largely due to constricted supply. The average UK city house price currently stands at £231,700 ranging from £109,000 in Glasgow to £455,000 across London. However, there are signs that the annual rate of growth in high growth cities in southern England is starting to plateau as the level of housing sales slows and affordability pressures on would-be buyers increase. The report suggest that uncertainty around the forthcoming European Union referendum is likely to slow activity further. Questions remain as to the level to which the campaign will influence households’ decision making and overall levels of housing market activity. The Brexit referendum comes at a time when other policy measures such as higher stamp duty for investors and second home owners are expected to impact market activity from investors who accounted for one in five sales in 2015. ‘Slower growth in sales volumes has been a trend seen over the last three years across the high value, high growth cities such as Cambridge, Oxford, Aberdeen and London where house prices have been rising for six consecutive years,’ said Richard Donnell, Insight Director at Hometrack. ‘High housing and moving costs are limiting access to the market for a growing number of households which, in our view, will result in lower turnover and slower house price growth,’ he added. He believes that the EU referendum adds further complexity to an already complex outlook. ‘Our analysis shows that the Scottish referendum, and the 18 month campaign that preceded it, resulted in 10% fewer transactions and slower house price growth over the period relative to England,’ said Donnell. ‘The shorter run up to the EU vote will help but the true impact will depend on how quickly the campaigning focuses on the economic ramifications for UK households and the knock on effect for housing related decisions as Scotland proved. A vote to remain in the EU should see a return to business as usual whereas a vote to leave will create additional uncertainty,’ he explained. ‘After a three year upturn in housing market activity and house prices the outlook for the market appears increasingly tied up with policy impacts and the potential outcome of the referendum rather than the operation of market forces. Businesses operating in housing face risk and uncertainty which will have to be managed and monitored carefully,’ he added. Continue reading
Rental prices in Scotland increased at end of 2015, latest index shows
There was a last minute end of year surge in Scottish rent growth with average residential rents up 0.4% in December, the highest monthly rise since June, the latest index report shows. This was uptick from a modest 0.1% rise the previous month and took the average monthly rent in Scotland to £548, just £1 below the summer peak reached in July, according to the data from lettings agent network Your Move. On an annual basis, rent growth is also starting to accelerate. Year on year rent rises had been steadily slowing since June when they stood at 3.1% but Scottish rents are now on average 2.2% higher than a year ago, up from 1.4% in the 12 months to November. The rise is due to a shortage of supply and an improvement in wages means that tenants can afford the rents, according to Brian Moran, lettings director at Your Move Scotland. ‘Outside of the summer months, the New Year often sees the second biggest cycle of new tenancies, and ushers in a busy time for the lettings market. It’s the period where people typically take up fresh career opportunities, and implement new life changes and this wave is already evident in the uptick of rents over November and December, as savvy tenants act quickly to beat the January rush,’ he explained. He pointed out that one major factor likely to affect the market in 2016 include the extra 3% property tax on buy to let properties from April. ‘It is likely to distort the natural flow of the market, with any further buy to let investment likely to be front loaded into the early months of the year. Once that deadline passes, and if investment into the private rented sector becomes more hesitant, tenants’ rents may become much more exposed to the problem of supply,’ added Moran. A breakdown of the figures show that in December, three of five regions saw month on month rent increases. The South saw the biggest with average rents rising 1.3% while Edinburgh and the Lothians saw a rise of 0.7% and Glasgow and the Clyde up by 0.5%. The Highlands and Islands saw the most significant monthly fall in rents in December with a fall of 0.9% while in the East of Scotland they fell by 0.3% month on month. On an annual basis, rents are higher across four of the five regions of Scotland. The biggest rise was in the Highlands and Islands with rents up 4.9%, Edinburgh and the Lothians they increased 4.8%, in Glasgow Clyde rents were up by 0.2% and in the East of Scotland rents dropped 0.7%. The report also shows that while there is typically a seasonal spike in arrears around the Christmas period, tenant arrears in Scotland dropped for the second month in a row in December, with the proportion of rent in arrears falling to 11.9% of… Continue reading
New pilot scheme starts in UK as part of Right to Buy scheme
Housing association tenants in some part of the UK can now move towards home ownership under new government plans to extend their right to buy. They are the first in the country to be able apply to the new Voluntary Right to Buy scheme as part of a pilot that is being run by five housing associations ahead of a national rollout later this year. It is part of a voluntary agreement between the government and the National Housing Federation to extend the Right to Buy to 1.3 million housing association tenants. Under the agreement, every home sold will be replaced nationally with a new affordable home. The existing Right to Buy gives social housing tenants the opportunity to buy their home with a discount of £103,900 in London and £77,900 elsewhere. ‘Thanks to the historic voluntary agreement with the sector a further 1.3 million housing association tenants now have the chance to open the door to their own home, starting with this trailblazing pilot scheme,’ said Communities Secretary, Greg Clark. He explained that the pilot will help inform the design and implementation of the main scheme before it is rolled out across the country following the passage of the Housing and Planning Bill. Applications for the pilot scheme are now open. He added that the government is committed to getting a million more people into home ownership by 2020 and it has recently been announced that investment in housing is doubling to more than £20 billion over the next five years to support the largest housing programme by any government since the 1970s. Continue reading
